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Home / Articles / Views / Danish Plan /  Municipal power is cheap in Longmont, but not Boulder
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Thursday, July 28,2011

Municipal power is cheap in Longmont, but not Boulder

By Paul Danish

Come November, Boulder voters will be asked whether they want to throw the city’s franchise with Xcel Energy under the bus and set up a municipal electric utility in its place. Voters will also be asked to double the city’s carbon tax (to 0.99 cent from 0.49 cent), mostly to pay the lawyers who will be handling the Boulder-Xcel divorce.

(Yeah, I know the “throwing under the bus” metaphor has been over-used to the point of nausea, but in this case it seems apt. That’s because until RTD took over bus service in the mid-1970s, Xcel’s predecessor company, Public Service Co. of Colorado, operated Boulder’s local buses. But we digress.)

Municipal power, huh? Well I’ve been living in Longmont for the past five years where we have it, and I can’t say enough good things about it.

Longmont has had municipal power for 99 years, and we pay a lot less for our electricity than people in Boulder do. A 2010 survey conducted by the Colorado Association of Municipal Utilities found that Longmont had the lowest rates in Colorado for residential, large commercial and industrial electric service, and the second-lowest rates for small commercial service. Longmont’s residential rate is about 30 percent less than what Boulder residents pay to Xcel. Power to the people, I say.

Of course, municipal power in Boulder won’t be anything like that. Boulder’s rates would be a lot higher than Longmont’s.

The reason Longmont’s rates are so low is not just because Longmont Power & Communications is a nonprofit corporation. It is because Longmont Power & Communications is a nonprofit corporation that gets 73 percent of the electricity it sells from coal-fired power plants. And most of the coal that goes into those plants — the big one is the Rawhide Energy Station, with 280 megawatts of coal-fired capacity — comes from Wyoming’s Powder River Basin, the cheapest coal in North America. As of July 11, Powder River Basin coal was selling for $14.60 a ton on the spot market. For comparison, West Virginia coal was selling for more than $78 a ton at the time.

Needless to say, we don’t have a carbon tax either.

(In addition to the 73 percent of Longmont’s power that comes from coal, the city gets 19.1 percent of its power from hydroelectric sources and another 2-plus percent from wind, which renewable-wise isn’t too shabby.)

A Boulder municipal utility won’t produce electricity from coal, of course. The whole point of forming a Boulder municipal electric utility is to expedite the city’s transition to carbonless kilowatts. That rules out coal and all but locks in higher rates.

True, electricity produced with wind and solar energy is rapidly becoming more competitive in the overall electricity market, but it still costs more to produce than electricity produced with Powder River Basin Black. That isn’t about to change anytime soon — particularly when it comes to base-load power plants, those that supply power 24/7.

In the solar power business, the saddest words of tongue and pen are “night” and “batteries not included.” (In the case of wind power, substitute “lulls and gales” for “night.”) If wind and solar are to be used to supply base-load electricity, they have to be able to supply power when the sun isn’t shining or the wind isn’t blowing (or is blowing too hard). The obvious solution is an energy storage device — a battery or a tank of molten salt, in the case of solar thermal, for example — that can store energy produced when the sun shines or the wind blows, for use when they don’t. Such technologies are in development and will likely be both available and affordable within a decade. They will solve the “batteries not included” problem of solar and wind power, but another, Good batteries may allow solar and wind plants to deliver power 24/7, but if a solar plant is to deliver as much power at night as it delivers during the day, it has to generate twice as much power during the day as it would if it were a daylight-only operation. That means a base-load solar plant has to have twice as many mirrors or photovoltaic panels and twice as much land as a plant that quits delivering power after sunset. And that cranks the capital costs big-time.

Although City Council members may be reluctant to admit it, in pushing for municipal power, the council is really asking Boulder to commit to base-load renewable power. If that isn’t the end-game, there isn’t much to starting the exercise in the first place.

I worry that the council hasn’t thought through the capital-cost implications of base-load renewable power and, as a result, is dramatically underestimating the ultimate cost of a green municipal utility. The voters need to get this point pinned down well in advance of Election Day.

Respond: letters@boulderweekly.com


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It's not easy, or cheap, being green.

 

 

REPLY TO THIS COMMENT

Longmont made their conversion 99 years ago, were their rates then below market?  Were they cheap in comparison to other utility suppliers of the time?  Was their expenditure for grid and other facilities considered cheap?

Where will Boulder's rates be, 99 years from now, based on "green" energy, in comparison to utilities still burning carbon?  Will carbon sources in 99 years even be considered a source?

Invest in the future and pay for the present, stop renting.

 

"Investment" is an interesting word to use. Implies you could gain, OR lose your shirt. My worry is that the city has woefully underestimated the costs of taking this on, not by a million or few, but in the hundreds of millions. And all those dollars won't go to green energy, they will go to Wall Street bondholders who own Boulder's debt. What a gamble.

 

Connie, you're absolutely correct in everything you say. But until the voters allow the BCC to look into the real expense there is no knowing. What I don't like is the amount of money that will be spent just finding out how much it will cost. There are lots of missing figures that the city can not obtain until they gain approval and force the information from Xcel. I will never see the city climb out from the debt of this possible "investment" but I do know what will be 99 years from now will not be as it is today. Any action taken today trying to address the future is a gamble.

 

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I attended a recent informational meeting on the Boulder muni question. I would recommend everyone else who has questions to do the same. Instead of large amounts of storage, their plan appears to be to have a natural gas plant as a backup source of energy. The biggest advantage of this is it can be ramped up very quickly (unlike coal plants which basically have to run at the same level for long periods of time.) 

Also, being a large business community, the power curve for Boulder is huge during the day, and much smaller at night. So, even if storage is used, it would not be the "need to generate twice as much during the day" as is assumed in this article. 

I went to the meeting with lots of questions - all were answered and had been well researched. I am voting yes - every major city with it's own muni has better rates than Xcel. Also, the muni backers are not saying they will be 100% renewable right away, they had steps (what we have to do to get to 30%, 60%, 90%, etc), so it was not all 100% green on day one - which is reasonable.

 

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For all those curious, Boulder rates would go down approximately 7% while simultaneously reducing GHG emissions by 24%. The reason is because if Boulder municipalizes its utility Boulder citizens will no longer paying taxes that Xcel pays to the state. Additionally, this new utility will be able to purchase power on the open, competitive market...like natural gas (which has significantly lower GHG emissions per kWh than dirty, sulfur, particulate producing coal...bye bye Valmont). Join the community conversation at renewableyes.org and listen to what local community members who have experience working in the sustainability and energy industries have to say!

 

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The author claima that a solar panel plant has to create twicw as much energy during the day because no energy is created at night is overly pessimistic.  The amount  of power used at night is much less than the amount of power used during the day so the ratio is not 2:1.  I don't know what it is but I know it is much less.

I found the detailed analysis of why Longmonts power is so inexpensive interesting and informative.

 

 
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